SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of
earliest event reported): July 2, 1999
Commission Registrant, State of Incorporation, I.R.S. Employer
File Number Address and Telephone Number Identification No.
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1-6047 GPU, Inc. 13-5516989
(a Pennsylvania corporation)
300 Madison Avenue
Morristown, New Jersey 07962-1911
Telephone (973) 455-8200
<PAGE>
ITEM 5. OTHER EVENTS.
On July 6, 1999, GPU, Inc. announced that it had entered into a definitive
agreement to purchase Cinergy Corp.'s ("Cinergy") 50% ownership interest in Avon
Energy Partners Holdings ("Avon") which, in turn, owns Midlands Electricity plc
("MEB"), for a price of 452.5 million British pounds (approximately US $700
million). As part of the transaction, Cinergy would retain MEB's gas trading
operations. The sale is expected to be completed in July 1999.
The Company and Cinergy had jointly formed Avon in 1996 to acquire MEB, an
English regional electric company.
A copy of GPU's related news release is annexed as an exhibit.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibit
1. GPU News Release, dated July 6, 1999.
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
GPU, INC.
By: /s/ T. G. Howson
----------------------------
T. G. Howson, Vice President
and Treasurer
Date: July 6, 1999
EXHIBIT TO BE FILED BY EDGAR
(c) 1 GPU News Release, dated July 6, 1999.
Exhibit (c) 1
GPU News Release
July 6, 1999
GPU To Acquire Cinergy's Interest in Midlands
MORRISTOWN, N.J. - July 6, 1999 - GPU, Inc. and Cinergy Global Resources Inc., a
subsidiary of Cinergy Corp., have reached an agreement on the purchase and sale
of Cinergy's interest in Midlands Electricity plc in the United Kingdom to GPU,
Inc., the companies announced today. The transaction will make Midlands
Electricity a wholly owned subsidiary of GPU, Inc. The purchase is expected to
be complete by mid-July.
Cinergy and GPU jointly acquired the British regional electric company in 1996
through Avon Energy Partners plc. Under the agreement, GPU will acquire
Cinergy's 50 percent equity interest for approximately $700 million in cash and
will retain Midlands' distribution and contracting businesses as well as its
ownership in 1,150 megawatts of independent power plants worldwide. The gas
trading operation headquartered in London will remain with Cinergy. Cinergy's
international energy project development subsidiary, Cinergy Global Power
Services Ltd., will continue to have a strong presence in the U.K. and operate
from bases in Stratford-upon-Avon and London. Cinergy Global Power's current
portfolio of international power investments and those under development is
unaffected by this transaction.
"The full ownership of Midlands will provide GPU a base for expansion in the
U.K. and Europe, something very important as we continue to implement our
strategy of geographic and horizontal growth," said GPU Chairman, President and
Chief Executive Officer Fred D. Hafer. "We see this transaction as a
significant step in growing our business as a premier global utility services
company."
Said Cinergy President and Chief Executive Officer James E. Rogers, "We've had a
good partnership with GPU during which Midlands has improved its productivity
and served its customers well. This is a move that aligns corporate assets with
corporate strategy. It gives Cinergy the opportunity to capture the value we
have achieved through our Midlands investment and pursue a strategy of
nonregulated domestic and international energy growth initiatives. We also will
continue to have two key growth platforms in the U.K.--international energy
project development and gas trading."
Since Cinergy and GPU acquired Midlands, the U.K. has completed its transition
to a fully competitive energy market and Midlands has made the strategic move to
separate its regulated, distribution business--which transfers electricity
across its wires to consumers--from its competitive supply operation--which
purchases and markets electricity from generators for resale to consumers. In a
transaction announced in 1998 and finalized last week, Midlands sold its supply
business to National Power plc and retained the regulated distribution lines and
substations.
"The operation of Midlands and its expertise in competitive contracting and
meter reading services will allow us to compete aggressively for these and
additional utility services in the U.K. and Europe," said Bruce Levy, GPU's
chief financial officer and executive in charge of international utility
holdings. "Midlands will provide a source of continued earnings and a platform
for growth of our utility services business."
"This has been a successful, strategic investment for Cinergy," said Cheryl
Foley, president of Cinergy Global Resources. "Along with financial gains,
ownership of Midlands has helped us establish a base for international growth.
From this investment we formed Cinergy Global Power, an experienced
international development team with a portfolio of power generation,
transmission and distribution assets worldwide."
Headquartered in Worcester, England, Midlands Electricity is one of 12 regional
electricity companies in England and Wales. The company distributes electricity
to 2.2 million customers in a 5,000-square-mile franchise service area that
includes Birmingham, the U.K.'s second largest city. Midlands owns and operates
approximately 40,000 miles of overhead and underground circuit.
GPU, Inc., headquartered in Morristown, NJ, is a registered utility holding
company providing utility and utility related services to customers throughout
the world. GPU's electric and gas utility companies--GPU Energy, Midlands
Electricity, GPU PowerNet, GPU GasNet and Emdersa--serve nearly 6 million
customers in the United States, the UK, Australia and Argentina. The company's
IPP units own and operate 22 projects in 7 countries and the United States.
GPU's 1998 revenues were $ 4.3 billion, and its total assets were $16.3 billion.
GPU's other subsidiaries include GPU Advanced Resources, Inc., GPU Generation,
Inc., GPU Nuclear, Inc., GPU Service, Inc. and GPU Telcom Services, Inc.
Cinergy is one of the United States' leading diversified energy companies. Its
operating companies, The Cincinnati Gas & Electric Company and PSI Energy Inc.,
serve more than 1.4 million electric customers and 471,000 gas customers in
Ohio, Indiana and Kentucky. Cinergy Global Resources Inc. is the company's
international business unit created in 1998 for Cinergy's international
investments and domestic initiatives in renewable generation. The company has
assets in power generation, transmission and distribution projects in the Czech
Republic, Spain, the United Kingdom, Zambia, Bangladesh, Estonia, and the United
States.
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Contacts:
GPU, Inc., Morristown, N.J.
News Contact: Jeff Dennard, 973-455-8333
Investor Contact: Joanne Barbieri, 973-455-8720
(http://www.gpu.com)
